8. Salam Sukuk (a) are not attractive to the seller, whose cash flow is enhanced

Question

8. Salam Sukuk (a) are not attractive to the seller, whose cash flow is enhanced in advance (b) are not attractive to the buyer, as the Salam price is normally lower than the prevailing spot price are certificates of equal value issued for the sake of mobilizing capital that is paid in advance in the shape of the price of the commodity to be delivered later can sell and buy in the secondary market. (c) (d) Repaying a loan in excess of the principal and without a precondition (a) is not commendable and also not compatible with Shariah (b) is commendable and compatible with the Sunnah of the holy Prophet (pbuh) (c) can be adopted as a system (d) would mean that a loan would necessarily yield a profit, which fits in the philosophy of 9. Islamic finance Marketing challenges are (a) developing new products 10. (b) developing successful marketing strategies (c) balancing profit and development (d) promoting new client profiles (e) all of the above Islamic financial institutions can avoid or eliminate their risk through (a) non-standardization of all business-related activities and processes (b) increase time of holding of the trading commodities (c ) construction of a diversified portfolio (d) not to fulfill the binding of contracts 11. 12. Operational Risk refers as (a) transactions Risk (b) fraud Risk (c) legal Risk (d) all of the above (e) none of the above Sukuk investors observed liquidity risk because (a) delay or default on payments/repayments by the originator (b) asset value falls reducing repayment amount on maturity (c) no buyers in secondary market for sukuk (d) sukuk no longer being shari'ah compliant (e) none of the above 13. 14. Financial institutions detect fraud through (a) operational Audit (Internal and External) (b) loan collection policies (c) client sampling (d) customer's complaints (e) all of the above

Explanation / Answer

Sukuk Bonds may be considered to be the Islamic Finance equivalent of a forward contract. However, the element of uncertainty is usually eliminated in such bonds to make them shariah compliant.

In Sukuk Bond issues, the Seller of the Bonds would receive the payment upfront and would have to deliver the assets at a later date resembling a forward contract structure.

Thus, the correct answer to your question is option (C).

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